July 02, 2007

Easterly takes on ... everyone, updated

Bill Easterly has trouble not just with foreign aid; apparently the problem is with the whole idea of "development" itself. His most recent article in Foreign Policy magazine starts ominously:

A dark ideological specter is haunting the world. It is almost as deadly as the tired ideologies of the last century — communism, fascism, and socialism — that failed so miserably. It feeds some of the most dangerous trends of our time, including religious fundamentalism. It is the half-century-old ideology of Developmentalism. And it is thriving.

Like all ideologies, Development promises a comprehensive final answer to all of society’s problems, from poverty and illiteracy to violence and despotic rulers. It shares the common ideological characteristic of suggesting there is only one correct answer, and it tolerates little dissent.

Hmm. I have to say I'm confused. I am sympathetic to many of Easterly's ideas--his skepticism on foreign aid (although not quite to the same extent) and his view that development happens because of "searchers" rather than planners. But surely now he is painting with too broad a brush here. There are many of us who believe in development--I wouldn't mind being called a "developmentalist"--but who do not see this as ideological attachment to a "single right path." The idea that what we do is dangerous, deadly, and feeds off religious fundamentalism is bizarre.

I am truly puzzled by what Easterly is trying to achieve with this article. Consider the following passage:

Development also shares another Marxist trait: It aspires to be scientific. Finding the one correct solution to poverty is seen as a scientific problem to be solved by the experts. They are always sure they know the answer, vehemently reject disagreement, and then later change their answers. In psychiatry, this is known as Borderline Personality Disorder. For the Development Experts, it’s a way of life. The answer at first was aid-financed investment and industrialization in poor countries, then it was market-oriented government policy reform, then it was fixing institutional problems such as corruption, then it was globalization, then it was the Poverty Reduction Strategy to achieve the Millennium Development Goals.

One reason the answers keep changing is because, in reality, high-growth countries follow a bewildering variety of paths to development, and the countries with high growth rates are constantly changing from decade to decade. Who could be more different than successful developers such as China and Chile, Botswana and Singapore, Taiwan and Turkey, or Hong Kong and Vietnam? What about the many countries who tried to emulate these rising stars and failed? What about the former stars who have fallen on hard times, like the Ivory Coast, which was one of the fastest developers of the 1960s and 1970s, only to become mired in a civil war? What about Mexico, which saw rapid growth until 1980 and has had slow growth ever since, despite embracing the experts’ reforms?

I agree with everything in the second paragraph. But I disagree strongly that these facts cannot be analyzed "scientifically." Our task as economists is to make sense of the evidence and to discover the generalities in the diverse experience with development. The fact that there have been fads and fashions in development thinking does not condemn the study of development any more than the fads and fashions in macroeconomics condemn that particular field of economics. And there are tons of first-class economists who are looking at these issues without the ideological blinders and self-assurance that Easterly complains about.

UPDATE: Bill Easterly responds:

Dani,

I’m surprised you disagreed so much with the piece, because your
work was one of my inspirations! To clarify, development economics is a science,
developmentalism is an ideology. The former can yield useful generalizations and
findings that can influence policy, while the latter aspires to a comprehensive,
dogmatic answer for a society to solve once and for all its problems of poverty,
dictatorship, and war. The former features researchers who are careful and
humble about what their findings imply for marginal changes for the better, the
latter features “experts” who see themselves as the key to wholescale social
transformation. “Big think development” by “development experts” (whether
academics or IMF/World Bank structural adjusters) has failed and will continue
to fail because it is too much like the latter extreme, and has actually done
harm by providing the excuse for a backlash into some destructive economic
policies like the xenophobic populism currently in favor in parts of Latin
America, Africa, and the Middle East.

However, nowhere do I dismiss all
of development economics! More humble economists will continue to provide a lot
of useful guidance in development. As the article says:

"The opposite of
ideology is freedom, the ability of societies to be unchained from foreign
control. The only “answer” to poverty reduction is freedom from being told the
answer. Free societies and individuals are not guaranteed to succeed. They will
make bad choices. But at least they bear the cost of those mistakes, and learn
from them. That stands in stark contrast to accountability-free
Developmentalism. This process of learning from mistakes is what produced the
repositories of common sense that make up mainstream economics.

The
opposite of Development ideology is not anything goes, but the pragmatic use of
time-tested economic ideas—the benefits of specialization, comparative
advantage, gains from trade, market-clearing prices, trade-offs, budget
constraints—by individuals, firms, governments, and societies as they find their
own success."

UPDATE2: I agree with many if not most of the details of Easterly's argument, but would not have packaged them in quite the way that he does, which I think gets too rhetorical and counterproductive at times. In his most recent book, Bill discusses many successful instances of aid--and yet the categorical message that one gets from him (at least until we get into the details) is "aid does not work." The whole notion that we should not have "big ideas" in development is also paradoxical and counterproductive. Bill himself flouts it in any case. "It's all about incentives" (first book) or "development is produced by searchers not planners" (second book) are both "big ideas." Again, we agree in (most of) the details, but disagree about--well, yes, about what the "big idea" that we should communicate is.

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Comments

Why do people (or least some of them) always have to put the things they disagree with together with fascism and communism?

I used to believe these ideologies were abhorred because of the millions of people they oppressed and slaugheterd, but sometimes it appears that their economics were the real evil. The ease with which Bill Easterly puts socialism (guilty of nationalizing corporations) and 'developmentism' ( guilty of wanting to help poor people in a different way than he does) in the same basket as dictatorships doesn't give much confidence in his grasp of history.

At one point in the article he mentions 'freedom is the opposite of ideology', and this looks to me precisely the problem with his article: he is treating freedom as ideology. He appears to claim that leaving poor countries alone will help them develop faster, but in the 'resistance is futile' part of the article he criticizes people for just wanting to make poor countries rich. It seems that he values the leaving alone part higher than development.

The strong part of the article is in pointing out that no-one has found a golden cure for development, but at the same time he suggests that as little outer interference as possible is a golden cure

I couldn't agree with Easterly more. Burma, for instance, will eventually develop with China's help in spite the $2 million funding of anti-government activism by Soros. American economic sanctions have placed it firmly outside of the American sphere of influence anyway.

Having always worked for companies, universities, and newspapers owned by locals in these countries, and having viewed useless USAID funded "experts" flying in, staying at five star hotels, and providing ultimately useless "expert" advice which, of course, is listened to for a time, as tissue might be used in abundant amounts, simply because it is free, but with no permanent results. Like Easterly, I have nothing but scorn for this sort of "expert."

Development economists should read more history books detailing the multitude interplay of different factors in different paths to survival and growth, the role of the US in South Korean growth as documented by Bruce Cumings and Meredith Woo Cumings, you never find history departments in "developing" countries anymore, or if you do, they are being taught how to deconstruct colonial pasts to place blame, and the only reason I can talk like this is simply because I have not been socialized into and am free from ostracism from a developmental org, univ dept, or community, thank god.

Finally, most recently, Thailand where I work has received relentless misinformed criticism and misrepresentation about events there. They follow their own imperfect but pragmatic path (with zero bloodshed!) while arrogant political scientist types from places like Stanford (my alma mater), for instance, without even deigning to study the place (no area studies there), heap scorn on them. Easterly has truly provided a manifesto for blogging.

I am one of those disdainful 'experts' and I agree with Easterly 100%. While there are plenty of good economists looking at the generalities of development, the temptation to turn a harmless "generality" into a scripted one-size-fits all plan is typically too great for development agencies to resist. External oversight bodies perpetuate the problem by rewarding "consistency," subjecting creative approaches to more rigorous audit, and further criticizing the actor in question for not "adhereing to best practice."

I suspect (hope) Easterly is trying to make the development community a little more self-reflective about the implied self riteousness that development supporters and professionals often bring to the issue. Given the tremendous lack of self-awareness in the discipline, I don't mind a bit of extreme rhetoric.

I always suggest a good economic basis for studying a situation: follow the money.

Development has been sub-optimal because some group of powerful people is making money off the present arrangement.

This group has been variously seen as:

Bureaucrats at the World Bank who were rated by how much money they could give out, rather than by how well it was used.

Corrupt local officials who siphon off the funds and live like a king as a result. We all know of plenty of examples.

Multinational banks who made lots of money lending to risky ventures knowing that the IMF (and the US government) would force repayment.

The first group may be changing their metrics of success while still holding on to their jobs, but the latter two wield so much political power that there has been no plan offered which can reform their behavior that isn't utopian.

i am confused too. who are the "unscienctific" ones he is talking about? if they are not prominent economists, why should he care? or his purpose is actually to confuse general readers who doesnt know much about the acadamic side of development economics (for whatever reason)?

I agree with Easterly 100%/. The idea of imposing development from the top is just ridiculous. And the idea that some answer exists out there is just as ridiculous. Easterly is not implying that we should abandon development economists, he is just saying what every mature economist knows - there are no definite answers and it is wrong to tell the poor that such answers exist. And yes I am a Zambian economist who loves Easterly's work to bits!

The problem here has an institutional side as well. Why do we have development "experts"? Why do they have a tendency to recommend "developmentalist" solutions? Why do they work with forces in countries that tend to systematically undermine attempts to spur development, however defined?

Well, in large part because the "experts" work for international agencies that have a mandate to work with governments, whether the governments want to be constructive or not, and that are constrained to spend their money accordingly. The IMF and WB are UN agencies, after all. The whole panalopy of international relationships and "sovereignity" gets dragged into the business forthwith. Finally, since both are largely financed by You Know Who (we ARE like Voldemort, you know), policies that would take development economics seriously aren't always in favor. You need an anthropologist to explain all this, preferably someone who's got Foucault by heart.

I'm not sure what we can do about the situation. If we had followed Keynes's original ideas for both agencies, things would have been a good deal better, largely because they would have had more institutional independence. I'm pretty sure about one thing, however: despite his good intentions and the undisputable points he raises, Easterly's arguments will have very little effect until more basic structural problems are addressed.

There's plenty to criticize about development and the IFIs. But Easterly is sounding more and more like Jeffrey Sachs these days. Of course their policy prescriptions are completely opposite, but both seem to be abandoning their impressive intellect in favor of simplistic world views (the very thing that Easterly laments). And they both seem to have a rather large chip on their shoulder, and come across as being quite petulant. It's too bad.

The distinction Easterly draws between development economics as a science and developmentalism as an ideology makes complete sense. For those familiar with his work, he has been a consistent critic of the specter of developmentalism and the idea that any one policy - trade, foriegn aid, democracy, etc... - can be a panacea for development. Context matters, and each country or community must determine its own conception of development and its heterodox route to move in this direction.

However, Easterly must be clearly explicit with this distinction at all times. As you note in your original posting, Easterly's article uses the terms developmentalism and development interchangeably, suggesting that he may have a problem with "the whole idea of 'development' itself".

Based on the segments of his article you have posted, Easterly sounds less like a development economist than a post-developmentalist; rather than pleading for a pragmatic contextual solution, he might be seen as arguing for development's end. This would put him in the ranks of scholars like James Ferguson, Geoffrey Rist, and Arturo Escobar. Even his reply - "the opposite of ideology is freedom, the ability of societies to be unchained from foreign control" - sounds painfully familiar to a post-development policy prescription that international actors should simply leave other socities alone. Social movements and grassroots activity alone will yield improvements in people's lives.

Does Easterly no longer see any role for international actors like the WB, IMF, NGOs, or even smaller actors like churches and civic groups? Societies can ruin themselves just as easily as outside actors, and there seems to be little reason to choose one over the other. His argument seems to take the idea of "development as freedom" a little too far.

Easterly makes a good point in defining the difference between development economics and developmentalism. Sachs might be said to fall in to both camps. However, those to whom Sachs turns for support (i.e. Hollywood) fall almost solely in the latter. That, I believe, is one of the dangers to which Easterly is reacting. Bono's recent, infamous outcry is a prime (perhaps overused) example. Donating money to the latest hip charity flouted by movie stars and repeating one line mantras smacks of demagoguery, and I am hard-pressed to think of a time when such efforts made a lasting difference.

Per Easterly's comparison of developmentalism to communism, let us not forget that the intentions of the early communist pioneers were also good - aiding the struggle of the working poor. However, as a system that impose its beliefs on others, it easily and rather quickly led to a tyrannical ideology and government. The path to hell...

The difficulty people have with Easterly, I believe (at times my self included) is that he doesn't offer a clear-cut, step-by-step alternative. However, this is in line with his argument - imposing a prescription for economic health from the outside has shown to have little long-term gain and is fraught with unintended consequences.

... is that he doesn't offer a clear-cut, step-by-step alternative. However, this is in line with his argument - imposing a prescription for economic health from the outside has shown to have little long-term gain and is fraught with unintended consequences.

While I agree that his criticisms on development policies are reasonable, I wouldn't say he is not offering a simple alternative. Instead, he is selling a very simple, attractive sounding alternative: leave poor countries alone and everything will turn out OK.

He mentiones that "Americans in 1776 had the same income level as the average African today. Yet, like all the present-day developed nations, the United States was lucky enough to escape poverty before there were Developmentalists."

This suggests that Easterly really believes that refraining from any form of aid, be it in money or advice, is the best alternative. This might well be true for many countries, and possibly for more than is currently realized. But I see no clear argument why this would be the best strategy for every country, in exactly the same way that no other startegy is perfect for every situation.

So, as I see it Easterly is just pushing his own, legitimate alternative strategy. But the way he does this is by attacking straw men and comparing all other ideas with fascism. He claims very strongly to have morality on his side, not just criticising other ideas for ineffectiveness, but for oppresiveness.

And this is the point I am missing: who is forcing ( as in 'with force') poor countries to accept foreign aid, develpoment advice or IMF/world bank loans? To call something a 'dark spectre' requires more than being too attractive to refuse. I understand there are many things that lead countries to accept the ideas of 'developmentists', not all of them good, but in the end it is the the enormous relative wealth of the developed countries that gives them this influence. And without any 'developmentism', the influences would just take another form.

Easterly's main gripe seems to be with the World Bank and the demands it places on countries that accept its aid and loans. But what is he suggesting in its place? I suppose he is not suggesting to loan the money anyway, but without any demands. The alternatives would be to borrow on the private market, with just as much strings attached and higher interests, or not borrow at all, with its own limitations. In some cases these might have been better alternatives than the World bank, but since they already exist, I am not sure how restricting the possibilities to them would increase freedom.

So, in the name of 'freedom as opposite of ideologies', Easterly has his own ideology, and a pretty restrictive one too: he is apparently opposed to development aid in any form, even as idea.

"sounds painfully familiar to a post-development policy prescription that international actors should simply leave other socities alone. Social movements and grassroots activity alone will yield improvements in people's lives"

our boy easty
wants landing zones
for the TNCs

HE WANTS TARGET SOCIETIES OPEN TO FOREIGN INVESTMENT

OPEN means no independent "national " purpose
ie develpoment plan

this is plunder planet written in
"let a thousand pbells of freedom ring out"
sloganeering

pure fireworks in the sky distraction
so the TNCs native agents can pick a few million more
landless peasant
pockets

its about access to abundent resources
and cheap labor supplies
for the corporate laputas

In view of Easterly's e-mail to you perhaps you could tell us whether you now agree with him. It seems to me that you may have read his article rather hastely! It was always quite clear to me that he was not attacking the all development profession but zealots who think some "answer" exists - and pursue it at all costs.

The Development Dictionary (ed. Wolfgang Sachs) of 1992 pretty much comprehensively laid out this kind of critique of development.

While I surely agree that "careful and humble" approaches in development economics are a crucial feature of broader thinking about development, the implication is that those with "big" ideas or perhaps more philosophical ideas about development are the culprits of bad development policy. Sure, the development industry has operated according to ideological views that have produced often disastrous results that belie the supposed objectives. But economics is a tool nonetheless, and this means that it's a means in the service of something. Its service is to "big" ideas about development, in this case. To pooh-pooh non-economic "big" ideas is to miss a more rigorous critique of both what's useful and what's deleterious about development. That can't be done simply from within development economics (given that it is instrumental to further normative claims). Of course, "careful and humble" are virtues in most things - in economics and in discussing the bigger ideas. But they're not virtues necessarily intrinsic to one approach at the exclusion of another. In fact, the claim itself that this is so is part and parcel of the arrogant elements of both development economics and the "big" ideas.

The Development Dictionary (ed. Wolfgang Sachs) of 1992 pretty much comprehensively laid out this kind of critique of development.

While I surely agree that "careful and humble" approaches in development economics are a crucial feature of broader thinking about development, the implication is that those with "big" ideas or perhaps more philosophical ideas about development are the culprits of bad development policy. Sure, the development industry has operated according to ideological views that have produced often disastrous results that belie the supposed objectives. But economics is a tool nonetheless, and this means that it's a means in the service of something. Its service is to "big" ideas about development, in this case. To pooh-pooh non-economic "big" ideas is to miss a more rigorous critique of both what's useful and what's deleterious about development. That can't be done simply from within development economics (given that it is instrumental to further normative claims). Of course, "careful and humble" are virtues in most things - in economics and in discussing the bigger ideas. But they're not virtues necessarily intrinsic to one approach at the exclusion of another. In fact, the claim itself that this is so is part and parcel of the arrogant elements of both development economics and the "big" ideas.

I base my argument not just on this post and Easterly's Foreign Policy article, but also his other writings including "White Man's Burden."

I believe you may still be arguing from a position that plans for economic development come from the outside. From this vantage point, Easterly's recommendation does seem like a simple, one-step process: do nothing. However, this is only part of what Easterly recommends. He does believe that developing economies need to make policy changes and develop action plans, but they need to do so internally, using "outsiders" in more of a consultancy role.

Per my comment about the use of force, I'm referring to the policies of international organizations (World Bank, IMF, western governments) that provide aid based upon a country strictly following prescribed steps for government spending, trade policies and such (i.e. Washington Consensus). Developing countries are also pressured via retaliatory trade restrictions to follow certain monetary and regulatory practices - the current pressure on China being a prime example.

Easterly is a polemicist. If such a person doesn't use some over-the-top language occasionally then how are they going to be heard above the din?

One can criticize his literary style, but this seems a minor issue compared to what his real message is. Only pie-eyed optimists think things are progressing well in the development area. He is right to turn people's attention to this, even if you don't like his method.

Agree or disagree with his analysis and proposed solutions, not with his literary style.

jere:
"Paine, can you say something about why Easterly would want to favor transnational corporations over "national" interests (assuming the two are in conflict)?"

nice question

perhaps
as i suggest he's the TNCs boy

why their boy and not the emerging nation's ???

the TNCs pay and honor
their flacks
lots lots better

as to the
range of possible
conflicts
between TNCs
and an innocent
emerging nation's "national interests"

the roll call is endless

might be easier to cite
the instances of
converging interest ....
as with china
today

proof:

the forex fiddle has not been stomped on
the way it might if
the eyes of wall street weren't so wide shut

despite sizable wage rate and job compacting "here"
the bilateeral trade has been very profitable to trans nats
and very developmental to china
but
there are always a precious few
"chosen emerging nations
that become favored targets
of north hemi
investment
and platforms for
reexport back north

After some looking around I agree that Easterly is more subtle than appears from this article alone. He definitely makes some good point, and as Robertdfeinman mentions, in this article he is probably shouting very hard just to get heard at all.

However, he did write this stand-alone article, and this one is not subtle. He claims his strategy is the only option, and suggests all other possibilities are not just wrong, but evil. Perhaps his style clouds the message, but he has chosen that style deliberately.

And the style is not entirely separable from the message. Through his big words about Freedom, Ideologues and Fascists, he suggests that poor countries have at present no choice but following the Washington Consensus etc. Of course the incentives to do so are very strong, but they are carrots, not sticks. As far as I can tell from this article, Easterly's alterative for aid with strings attached is not aid without atrings, but no aid at all. If countries consider the rules they have to follow to get aid not worth the money, they can simply refuse. That's simply not the kind of restriction that justifies comparisons to totalitarian regimes.

Marius, Easterly and subtle? are you kidding? arrogant is the kindest word. I have seen him speak at the recent aea conference in chicago. was so attracted to the elusive quest years ago. but it seems anger and shouting (not literally, but from his choice of words) has overtaken him now. Alas!

We need to understand that development is a bit like learning how to ride a bike and, at the end of the day it is something that must be done on one’s own. In fact, no matter how much we could help in the preparations, we will not stand a chance to achieve lasting results if we are not willing or do not know how to let them go.

As a sociologist with over 30 years field experience in development I find the current 'storm in a teacup' between economists largely amusing. First, to Easterly's plea for 'humble' economists; in all my years in the field these have been extremely rare, if not extinct birds. Many of the problems in development have emanated from the arrogance of economists constructing grand theories that totally ignore historical, social and culture factors bearing on policies to change,often radically, the way people think and act and have done so for generations. For example, Lant Pritchett was recently quoted in the NYT as saying he does think much about culture because he is an economist! As a result the history of development is a series of shibboleths, many of which have been only reinventions of the wheel that have promised much but delivered little. The latest crop from Sachs, Easterly and now Paul Collier are likely to go the same way even as the poor remain poor. The analogy with 'cargo cults' which Peter Berger used 30 years ago is all too obvious.

Perhaps the worst offenders in this sense are the 'young lions' that the World Bank, in its wisdom, dispatches to adminster structural adjustment and other forms of economic medicine, without ever previously have had to be accountable for any real world decison-making. To say that they are often in error but never in doubt is putting it mildly.

So I think we need to be less locked into dogma and (I agree with Easterly on this) the ideology of development and more concerned with the real world. This will not only mean, but require, that developing countries do become more responsible for their own development. In turn this will need a radical rethinking on the uses of aid and the impact of a globalized world, or as Collier suggests the poor simply will fall further behind.

The rant against "developmentalism" has been going on in various left circles for close to a generation now. The most intelligent statement of that school of thinking is James Ferguson's The Anti-Politics Machine (a brilliant work in all respects). What's new about the FP journal is not the argument but the venue -- that such arguments have migrated from the left to a deeply establishmentarian publication speaks volumes to the crisis of confidence in development circles today.

I agree and also disagree with mr. Easterly and thus agree with you more regarding some sort of optimism in helping developing countries esspecially through IFIs like world bank esspecailly as of late when they are giving heed to lot of policy suggestions you yourself have been making for giving a country specific diagnosis to country specific issues. All countries and regions are not the same. Thus Donor agencies should also promote indigenous thought process in formating their country specific policy briefs and strategies, though a larger level of a general development framework would also remain intact. For example, promotion of education, rule of law, good governance, de centralisation, privatisation and trade liberalisation et al are all important measures to ensure economic development. Implementation should be promoted and supplemented with good bit of coordination from donor agencies as in many cases, many governments in developing countries could spend their resources only on a handful of prioritised areas, where other important areas would be neglected if not for refined donor help.

It is refreshing to get the realist approach given by Easterly that is so often shrouded by ultra-liberals like Sachs. However, his arguments are often so critical and over the top that it detracts from his points altogether. He also uses broad examples to convolute the facts and twist them in a way that falsely benefits his point. For instance - while I found his connection between global development and fascism amusing - my favorite comparison was the following:

"Few realize that Americans in 1776 had the same income level as the average African today. Yet, like all the present-day developed nations, the United States was lucky enough to escape poverty before there were Developmentalists."

This claim has no hard data behind it. Do 230 years of inflation mean anything?

Moreover, comparing the American experience throughout the nineteenth century to that of the entire African continent today is ludicrous. Alexander de Tocqueville was the first to underscore the notion of "American exceptionalism" - a sort of progressive "frontier spirit" and socially mobile ethos that was unique to development in the United States. To compare the economic growth with that of Africa is a bit much in my opinion.

Also, I agree with Dawood above. Mr. Sachs provides the "differential diagnosis" approach. All countries and regions are not the same, and the IFI's cannot assume that one singular panacea for world poverty exists. The MCA has taken this route by honing in on the needs of each individual compact country, but is unfortunately under fire for its sluggish (but certainly not careless) payment distributions.

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We need to understand that development is a bit like learning how to ride a bike and, at the end of the day it is something that must be done on one’s own. In fact, no matter how much we could help in the preparations, we will not stand a chance to achieve lasting results if we are not willing or do not know how to let them go.

In view of Easterly's e-mail to you perhaps you could tell us whether you now agree with him. It seems to me that you may have read his article rather hastely! It was always quite clear to me that he was not attacking the all development profession but zealots who think some "answer" exists - and pursue it at all costs.

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